Microsoft Writes Off Nokia Deal, Announces Major Job Cuts

Microsoft is announcing a major write-off and job cuts related to the Lumia smartphone unit it bought from Nokia just a year and a half ago. With the move, Microsoft will cut 7800 jobs from the division and take a $7.2 billion write-off from the acquisition. The move follows the recent departure of former Nokia CEO and Microsoft Device Chief Stephen Elop and his top lieutenant Jo Harlow.

Microsoft is pinning the move on diminished expectations for phone hardware under Microsoft’s current strategies. While the company has made no plans to drop the Lumia brand as of yet, but Microsoft CEO Satya Nadella stated that first party-devices were only a party of the efforts to create a vibrant “Windows Ecosystem”.

Microsoft also announced transfer of mapping assets to Uber and their display advertising arm to Verizon’s AOL division.

Writer’s Take

If it seemed like the selection of the Microsoft CEO last year was a referendum on that’s because it was. Ballmer and Elop wanted a strategy based around devices, but the company ultimately went with a cloud and services-based strategy from now CEO Satya Nadella. I don’t know if first-party devices are a long-term part of that. It will be interesting to see if any moves are made with the Surface tablet and Xbox division.